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Nuvo Research announces 2010 second quarter financial results

^{Published on 2010-07-29 14:10:34 - Market Wire}
 

 - Announced that Mallinckrodt Inc., a Covidien (NYSE:COV) company ("Covidien"), Nuvo's licensee, began selling Pennsaid, a topical NSAID, in the United States. Nuvo receives royalties at rates consistent with industry standards from Covidien on net U.S. Pennsaid sales. Nuvo is also eligible to receive sales milestone payments totaling up to US$100 million if certain U.S. sales levels are achieved; - Completed enrollment in Nuvo's European Phase 2 trial evaluating WF10 as a treatment for allergic rhinitis. The Company anticipates completing the in-patient portion of the study and receiving topline results in late 2010; - Subsequent to quarter end, Nuvo received its first royalty payment in the amount of CDN$1.2 million from Covidien relating to U.S. sales of Pennsaid; - Subsequent to quarter end, Covidien began recruiting participants in its Phase 2 clinical study of Pennsaid Gel, a follow-on product to Pennsaid with two times per day dosing and anticipated patent protection. 

 Financial Results: (thousands of Canadian dollars) Three months Three months Six months Six months ended ended ended ended June 30, 2010 June 30, 2009 June 30, 2010 June 30, 2009 ------------------------------------------------------------------------- $ $ $ $ ------------------------------------------------------------------------- Revenue 4,244 2,706 8,295 5,753 Net loss (2,862) (1,664) (5,867) (4,532) ------------------------------------------------------------------------- 

 NUVO RESEARCH INC. CONSOLIDATED BALANCE SHEET FOR THE PERIOD ENDED JUNE 30, 2010 As at As at June 30, December 31, 2010 2009 Unaudited Audited (Canadian dollars in thousands) $ $ ------------------------------------------------------------------------- ASSETS CURRENT Cash and cash equivalents 32,867 42,102 Accounts receivable 3,735 2,091 Inventories 1,571 2,078 Other current assets 985 445 ------------------------------------------------------------------------- TOTAL CURRENT ASSETS 39,158 46,716 Property, plant and equipment 2,204 1,834 ------------------------------------------------------------------------- TOTAL ASSETS 41,362 48,550 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT Accounts payable and accrued liabilities 3,276 4,589 Deferred revenue 2,351 2,241 Current portion of capital lease obligations 93 79 Current portion of debentures - 3,038 ------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 5,720 9,947 Deferred revenue 910 1,080 Capital lease obligations 26 65 ------------------------------------------------------------------------- TOTAL LIABILITIES 6,656 11,092 ------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Common shares 216,707 210,086 Contributed surplus 12,582 12,536 Accumulated other comprehensive income 114 114 Deficit (194,697) (185,278) ------------------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY 34,706 37,458 ------------------------------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 41,362 48,550 ------------------------------------------------------------------------- ------------------------------------------------------------------------- NUVO RESEARCH INC. CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD ENDED JUNE 30, 2010 Three months Six months ended June 30, ended June 30, Unaudited 2010 2009 2010 2009 (Canadian dollars in thousands, except per share and share figures) $ $ $ $ ------------------------------------------------------------------------- REVENUE Product sales 3,311 2,075 6,578 4,458 Cost of goods sold 2,063 1,449 4,255 2,583 ------------------------------------------------------------------------- Gross margin on product sales 1,248 626 2,323 1,875 Other revenue Licensing fees 560 560 1,120 1,120 Royalties 188 - 188 - Research and other contract revenue 185 71 409 175 ------------------------------------------------------------------------- 2,181 1,257 4,040 3,170 ------------------------------------------------------------------------- EXPENSES Research and development 2,229 865 4,538 3,821 Selling, general and administrative expenses 2,506 1,900 4,509 3,373 Amortization of property, plant, and equipment 124 148 242 297 Foreign currency (gain) loss 192 (210) 597 (219) Interest expense 3 227 63 473 Interest income (16) (9) (42) (43) ------------------------------------------------------------------------- 5,038 2,921 9,907 7,702 ------------------------------------------------------------------------- LOSS BEFORE INCOME TAXES (2,857) (1,664) (5,867) (4,532) ------------------------------------------------------------------------- Income taxes 5 - 5 - ------------------------------------------------------------------------- Net Loss and total comprehensive loss (2,862) (1,664) (5,872) (4,532) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net loss per common share - basic and diluted (0.01) (0.01) (0.01) (0.01) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Average number of common shares outstanding - basic and diluted (millions) 417.3 352.6 409.1 336.2 ------------------------------------------------------------------------- ------------------------------------------------------------------------- NUVO RESEARCH INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE PERIOD ENDED JUNE 30, 2010 Three months Six months ended June 30, ended June 30, Unaudited 2010 2009 2010 2009 (Canadian dollars in thousands) $ $ $ $ ------------------------------------------------------------------------- OPERATING ACTIVITIES Net loss (2,862) (1,664) (5,872) (4,532) Items not involving current cash flows: Amortization 124 148 242 297 Deferred revenue recognized (579) (560) (1,120) (1,120) Stock-based compensation 22 277 47 503 Accretion of interest on debentures - 147 31 295 Unrealized foreign exchange loss (gain) 123 (75) 648 (66) Other 16 (273) 15 (257) ------------------------------------------------------------------------- (3,156) (2,000) (6,009) (4,880) Net change in non-cash working capital 214 (201) (2,136) (510) Deferred proceeds from licensing arrangements, royalty payments and advances on research contracts - 11,318 14 11,341 ------------------------------------------------------------------------- CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (2,942) 9,117 (8,131) 5,951 ------------------------------------------------------------------------- INVESTING ACTIVITIES Acquisition of property, plant and equipment (370) (148) (604) (203) ------------------------------------------------------------------------- CASH USED IN INVESTING ACTIVITIES (370) (148) (604) (203) ------------------------------------------------------------------------- FINANCING ACTIVITIES Issuance of common shares and warrants, net of related costs 5 3,246 5 5,442 Repayments of long-term debt and capital lease obligations (19) (32) (38) (94) ------------------------------------------------------------------------- CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (14) 3,214 (33) 5,348 ------------------------------------------------------------------------- Effect of exchange rate changes on cash and cash equivalents (61) (99) (467) (55) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net change in cash and cash equivalents during the period (3,387) 12,084 (9,235) 11,041 Cash and cash equivalents, beginning of period 36,254 14,176 42,102 15,219 ------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS, END OF PERIOD 32,867 26,260 32,867 26,260 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Interest paid 2 166 55 261 -------------------------------------------------------------------------